STOCKS TELEGRAPH

Tag: Regulation

  • Japan set to revise Crypto Laws in the Country

    Japan set to revise Crypto Laws in the Country

    In Japan, where the country’s top financial and crypto regulator has proposed legal revisions to payments-related legislation, a slew of new crypto regulations are on the way.

    The ideas came from the Financial Services Agency (FSA), which recommended amending two current acts of law in order to “create a robust and efficient settlements system” for the digital financial era.

    Stablecoin-related issues are included in the legislation, as well as new protocols aimed to “enhance the effectiveness of [crypto] transaction monitoring at banks” and other financial institutions, according to CoinPost.

    The FSA stated that certain stablecoins and stablecoin issuances do not provide enough user protection, despite the fact that complete measures for the regulation of these assets are expected to be released later.

    Brokers, like crypto exchanges, will be required to report to regulators on a regular basis. It will also have the authority to issue document submission requests, perform on-site inspections, issue business improvement orders, and even close down enterprises that do not comply or satisfy criteria.

    The bundle of measures, on the other hand, is not just aimed at ensuring compliance. The FSA stated that it will work to promote the nation’s blockchain and crypto industries and that it will strive to include legally binding definitions of “crypto-assets” in the definitions of “electronic methods of payment” in the acts.

    The policies also aim to improve transaction monitoring effectiveness by creating a platform for overseas-based crypto exchanges to collaborate with local trading platforms on anti-money laundering (AML) procedures that affect the banking industry.

    The FSA plans to build a network of exchange transaction experts who will work together to investigate questionable transactions in both the FX and cryptocurrency markets.

    Additional safeguards were implemented to detect suspicious-looking prepay transactions, such as account top-ups and gift card purchases, which could result in AML violations.

    The adjustments will need to be signed off on by the government, and they will also need to be approved by parliament. However, the FSA’s past legislation requests have all been passed, and they are likely to be bundled with other non-controversial legal modifications. As a result, they are expected to be enacted into law in the following weeks and promulgated later this year.

  • US regulators to join hands an interagency crypto regulation team

    US regulators to join hands an interagency crypto regulation team

    The regulation of cryptocurrencies had been a sour topic for regulators all over the world. The blockchain technology is relatively newer and not many people are well-versed in it, which makes navigating it all the more difficult. Moreover, the crypto sphere is also highly dynamic. Every day newer uses and newer innovations emerge in the market which places regulators at even a more difficult place.

    The brutal market crash may have put a lot of things into perspective as regulators in the United States have decided to join hands for a cryptocurrency regulatory body. The new head of the Office of the Comptroller of the Currency, Michael Hsu, revealed that the agency had been in talks with the United States Federal Reserve regarding a regulatory body focused solely on cryptocurrency. The regulatory body is described as an “interagency policy sprint team”.

    During a virtual meeting, Hsu discussed the proposition with the Fed vice chairman of supervision Randal Quarles as well as FDIC chairman, Jelena McWilliams. Randal Quarles also disclosed that the Fed had been actively working with other government agencies for the purpose of cryptocurrency regulation.

    Asian countries have had mixed stances when it comes cryptocurrencies. Turkey is one of the countries on the forefront of war against cryptocurrency-caused problems. The country has announced a new policy which forces crypto exchanges to inform the Financial Crimes Investigation Board (MASAK) of any cryptocurrency transaction exceeding $1,200. On the other hand, South Korea had launched a crackdown of its own on cryptocurrencies. Major regulatory bodies of the country had joined hands against problems like tax evasion and money laundering that are fueled by cryptocurrencies.

  • Turkey’s new policy on crypto monitoring

    Turkey’s new policy on crypto monitoring

    The Turkish government has not been a fan of cryptocurrencies – to say the least. The government likes to maintain a strict control over its digital payment ecosystem and any disruptions are not tolerable. The Turkish government had also banned PayPal in the country for the same purpose. Now, the rise of cryptocurrencies has posed a challenge for the government and the regulators in the country.

    The Turkish Minister of Treasury and Finance Lutfi Elvan announced a new policy that forced cryptocurrency exchanges in the country to inform the Financial Crimes Investigation Board (MASAK) about crypto transactions that are valued above $1,200. The country has banned the use of cryptocurrencies as a mode of payment and now the regulatory body, MASAK, is given the power to oversee and audit cryptocurrency exchanges. MASAK has also prepared a detailed guide for crypto exchanges in the country to be followed without exception.

    Regulation of the cryptocurrency sphere has been regarded as a complex task throughout the world but now as the industry is set to become larger than life itself, governments. Have proactively started taking measures to control and regulate the market as much as possible. The South Korean government has been one of the most active in terms of cryptocurrency regulation. A law has been imposed which requires accounts on crypto exchanges to be based only on real names while another law imposes a 20% capital gains tax on cryptocurrency profits.

    The IRS, too, has finally put its approved “John Doe” summons to use. A Federal court in California granted a motion for Kraken to provide client information to the tax regulatory authority. The wave of regulation in the cryptocurrency sphere may only be the beginning of what is to come.

  • Another country taking the leap toward CBDC: Kazakhstan

    Another country taking the leap toward CBDC: Kazakhstan

    The National Bank of Kazakhstan, NBRK, has issued a report on a digital tenge pilot and has opened a public consultation on the central bank digital currency.

    The digital tenge is a new kind of money to be issued by the central bank which is designed to increase the efficiency of the payment ecosystem in the country by reducing dependance on cash settlement. The National Bank has stressed that the CBDC is not aimed at replacing cash or the currency of the country. In fact, it is designed to act merely as an aide in the payment ecosystem. The CBDC is to be used an as alternative to conventional payment methods.

    According to NBRK the digital tenge will improve the competitiveness in the market and act to strengthen the financial system in the country. The bank has also paid attention towards privacy and security concerns with the digital tenge.

    China is the first major economy to take a step towards a central bank digital currency. The largest country by population has launched a digital yuan – e-renminbi. The country has successfully run pilot tests and banks are actively promoting the digital yuan. The digital yuan marked a new phase in the digitization of the globe. As the country also likes to maintain strict control over the digital sphere, the digital yuan will also act as a tool for that.

    The Bank of England, BoE, had also been debating the issuance of a central bank digital currency for quite some time now. However, the bank has been hesitant in launching one. Although the bank has not officially stated a decision yet, it has started recruiting for CBDC positions. More countries may soon follow suit with launching their central bank digital currencies.

  • Kraken to provide information to IRS, Californian federal court

    Kraken to provide information to IRS, Californian federal court

    Regulators throughout the world had been struggling with the complexities of the cryptocurrency industry. Because the blockchain technology is novel and not widely understood, regulating the market had not been an easy feat.

    A federal court in California has ordered the cryptocurrency exchange to provide information about users who have conducted transactions worth $20,000 or more in a year to the Internal Revenue Service in lieu with the “John Doe” summons that the IRS had gotten approved earlier.

    Where South Korea has launched a crackdown of its own on the cryptocurrency industry because of increased tax evasion and money laundering, the US is not lagging far behind. The Internal Revenue Service had held the cryptocurrency industry accountable for almost $1 trillion uncollected taxes. The tax authority has more than disdain for the crypto sphere and has launched a crackdown of its own. The IRS had gotten “John Doe” summons approved earlier which gives the tax regulator immense power.

    However, after a brief cool down the regulator has once again resumed its crackdown with full force. Utilisng the John Dow summons, the Internal Revenue Service had gotten approval from a North California federal court to access the accounts of users with more than $20,000 transactions worth on the leading crypto exchange, Kraken.

    Crypto holders are obligated to meet the same tax obligations – which many are not. The John Doe summons are an effort of the regulator to bring equity to the industry and punish tax evaders. The John Doe summons allow the IRS information about all taxpayers in a specified class – say, with transactions worth $20,000 and above. With the immense power of the John Doe summons, the IRS is set to take the crackdown on cryptocurrency industry to the next level.

  • The next phase in South Korea’s crackdown on cryptocurrencies

    The next phase in South Korea’s crackdown on cryptocurrencies

    South Korean regulators have asked banks to provide information on their cryptocurrency clients. As the regulators try to understand the complex cryptocurrency sphere, a regulatory body in the country has asked banks to reveal information about corporate accounts of cryptocurrency exchanges that are not listed on real-name basis.

    The country had launched a crackdown on the crypto industry as cryptocurrencies have contributed to a surge in illegal activities like money laundering and tax evasion in South Korea. Various regulatory bodies have joined hands in order to curb the problem with straight monitoring of the crypto industry. Laws have also been passed to help regulate the market as much as possible.

    One of the controversial laws in a 20% capital gains tax imposed on all cryptocurrency profits. The law is set to come into effect in January 2021 and have resulted in a public outcry. Another not-so-controversial law requires users to create accounts on crypto exchanges only on real-name basis. The Act on Reporting and Using Specified Transaction Information has been in effect since March.

    However, only four major cryptocurrency exchanges in South Korea have complied with the law by setting up real name basis accounts while the rest are lagging. The regulators in the country are not taking well to the non-compliance which is why an unnamed regulator has asked bank to reveal privileged information about such corporate clients.

    The crackdown is set to last till June and it appears the regulators have full intentions of utilizing the time efficiently. Earlier, the city of Seoul had seized $22 million worth of cryptocurrencies from tax delinquents. The city’s tax authority, National Tax Service had issued a list of 1,566 individuals and companies with overdue taxes. $22 million worth of cryptocurrencies had been confiscated from 676 of the 1,566 identified tax evaders.

  • Binance Adding Three New Stock Tokens to its Offering

    Binance Adding Three New Stock Tokens to its Offering

    Binance has announced to launch the stock tokens of Microstrategy (MSTR), Apple (AAPL), and Microsoft (MSTF). The launch of the three additional stock tokens would make the total tokenized stock offering of Binance equal to five. The first stock token to go live on the exchange is MSTR today, followed by Apple on April 28 and Microsoft on April 30. The first stock to be traded on the cryptocurrency exchange was Tesla (TSLA) on April 12 followed by Coinbase (COIN) on April 15.

    As the stock tokens were created in partnership with the investment group CM-Equity, the tokens are not available in areas restricted to CM-Equity like the US, mainland China, and Turkey. CM-Equity is also responsible for backing the stock tokens by portfolios of the underlying securities.

    Binance’s new product, tradable stock tokens, offers traders the opportunity to trade tokenized fractions of stocks. Users can trade fractionalized units of stocks as low as one-hundredth of a stock. The stock tokens are used to track the performance of the underlying security. The stock tokens are traded against Binancestabelcoin (BUSD) and not against US Dollars.

    The tokenized stocks have been under scrutiny of European regulators as the true nature of the product is argued. Germany’s Federal Financial Supervisory Authority, BaFin, is worried that the tokenized stock may not be able to provide the required transparency. European Union regulators have also voiced their concerned over the new product. However, Binance has not let it affect its new product as it adds three new stock tokens to its offerings.

    The launch of the new stock tokens and Binance’s expansion is because of its strong competition with the crypto derivatives platform, FTX, which had earlier launched its own stock tokens.

  • South Korea’s Crackdown on Cryptocurrencies

    South Korea’s Crackdown on Cryptocurrencies

    With the world moving towards a fast-paced adoption of cryptocurrencies, regulators are facing a lot of problems trying to navigate the tricky waters of the crypto sphere. Throughout the world, governments have been vocal about the riskiness of cryptocurrency investment whereas others have been worried about the susceptibility of cryptocurrencies to criminal activities. Cryptocurrencies are notoriously known to be hotbeds for illegal activities especially money laundering and tax evasion because of the lack of regulation in the industry.

    Asia have had a love-hate relationship with cryptocurrencies but amidst the recent rise in crypto adoption, regulators have become increasingly strict. South Korean regulatory authorities have joined hands to crackdown on the rampant illegal activities going on in the cryptocurrency market. The Ministry of Economy and Finance, the Ministry of Justice, the Financial Services Commission, and the National Police Agency have, together, launched a plan to eradicate the problems brought by cryptocurrencies. With every agency playing its role, there has been an increase in monitoring of transactions – in the country as well as across border.

    The crackdown has come to fruition as the city of Seoul has announced the seizure of $22 million worth of cryptocurrencies on account of tax evasion from individuals and companies. The city’s tax authority, National Tax Service, had identified 1,566 individuals and company executives with overdue taxes. $22 million worth of cryptocurrencies were seized from three different cryptocurrency exchanges from 676 of the 1,566 individuals.

    Out of the total tax delinquents, 118 of them have remitted $1 million to the government. The cryptocurrency holders have also appealed to the government to not liquidate the cryptocurrencies as their value is expected to increase.

  • Binance’s New Product Under Scrutiny

    Binance’s New Product Under Scrutiny

    The leading cryptocurrency exchange Binance had recently launched a new product – tradable stock tokens. The tradable stock tokens are aimed to enable users to benefit from returns on equities without having to purchase full shares. The first stock token to be publically traded is Tesla. Through the stock, token users can purchase as little has one-hundredth of Tesla’s stock which will be represented by a digital token. The stock price will be settled in a stablecoin, Binance USD (BUSD), and will not be tradeable for shares.

    Regulation in the cryptocurrency sphere has been a widely debated topic and with the rise of the crypto market governments are realizing regulation needs to be taken seriously while preserving an environment that harbors innovation and cooperation as well.

    The new tradeable stock token of Binance has not gone unnoticed by regulators. European and British regulators are debating over the tradeable stock token’s compliance with securities laws. Germany’s Federal Financial Supervisory Authority, BaFin, is worried that the tokenized stock may not be able to provide the required transparency. There is ambiguity regarding the nature of the stock tokens and it is unclear whether they are securities or not.

    The tradeable stock was designed in partnership with the regulated investment group CM-Equity AG. Binance has argued that the tokens are official products of CM-Equity AG which makes them fully compliant with European as well as German regulations. The cryptocurrency exchange further argues that since the stocks are settled in Binance USD and not fiat currency, they do not give the same rights as traditional stocks.

  • South Korea’s Tightening Grip On Crypto Market In The Country

    South Korea’s Tightening Grip On Crypto Market In The Country

    Among other things, cryptocurrencies are also notoriously known for facilitating illegal transactions. Because of the anonymity provided by privacy coins, they are likely to become the choice for illegal activities. However, another side of the story states data suggests most illegal transactions still happen through cash. Nonetheless, Asian governments have been wary of cryptocurrencies because of their high riskiness as well as their propensity to facilitate illegal activities.

    The government of South Korea had been vocal about their concerns with the cryptocurrency market in the country. The regulators have taken notice of the use of cryptocurrencies in money laundering, tax evasion, and other illegal activities. Major financial authorities in the country have joined hands to combat the problem.

    The crackdown is set to last till June. This period will see extremely strict regulation and close monitoring. The Financial Services Commission has directed all financial institutions to work on the monitoring of cryptocurrency withdrawals. The Financial Intelligence Unit had been designated to deal with suspicious activities. The finance ministry and Financial Supervisory Services are also monitoring cross-border payments closely.

    The country has strengthened its cryptocurrency regulation even more after imposing the Act on Reporting and Using Specified Transaction Information in March. The Act requires cryptocurrency traders and investors to trade only with real-name based accounts.